Summary 2007 WY 64

Summary of Decision issued April 24, 2007

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Case Name: Pittard v. Great Lakes Aviation

Citation: 2007 WY 64

Docket Number: 05-230

Appeal from the District Court of Laramie County, the Honorable Dan Spangler, Judge, Retired

Representing Appellant (Defendant): David D. Ditto of Associated Legal Group, LLC, Cheyenne, Wyoming.

Representing Appellee (Plaintiff): Bradley T. Cave of Holland & Hart, LLP, Cheyenne, Wyoming; Dannie B. Fogelman of Ford & Harrison, LLP, Washington, DC. Argument by Mr. Fogelman.

Issues: Whether Great Lakes’ state law breach of contract claim was pre-empted by the Railway Labor Act (RLA.) Whether the district court erred in enforcing an agreement that allegedly conflicted with and was superseded by the collective bargaining agreement (CBA.) Whether the district court properly granted summary judgment on Great Lakes’ breach of contract claim.

Facts/Discussion: Pittard appealed from an order granting summary judgment for Great Lakes Aviation (Great Lakes) on its breach of contract claim. He contended the district court erred by (1) assuming jurisdiction of an employment dispute subject to mandatory arbitration under the Railway Labor Act (RLA), 45 U.S.C. § 151 et seq.; (2) enforcing an individual contract that conflicted with a collective bargaining agreement; and (3) granting summary judgment despite the existence of genuine issues of material fact on his affirmative defenses and counterclaims.
Standard of Review: The Court considers the record de novo when reviewing an order granting summary judgment.
Pre-emption by RLA: The Court disagreed with the district court’s conclusion that Great Lakes was free to enforce the training agreement in state court without a determination by the arbitrator as to whether the agreement violated the collective bargaining agreement (CBA.) The question whether a certain state action is pre-empted by federal law is one of Congressional intent. Congress’ purpose in passing the RLA was to promote stability in labor-management relations by providing a comprehensive framework for resolving labor disputes. There are two classes of disputes, major and minor. Major disputes involve disputes over the meaning of an existing CBA in a particular fact situation. Minor disputes seek to enforce them. A determination that a dispute constitutes a major or minor dispute under the RLA pre-empts a state law cause of action. The Court considered the types of minor disputes involving CBAs that are governed by the RLA to determine if the instant case constituted a minor dispute as governed by the RLA. The Court stated the standard applied in RLA cases was virtually identical to the pre-emption standard the United States Supreme Court employed in cases involving § 301 of the Labor Management Relations Act, 29 U.S.C. § 185. The Court referred to Lingle v. Norge Div. of Magic Chef, Inc. stating that where the resolution of a state-law claim depends on an interpretation of the CBA, the claim is pre-empted. However, purely factual questions about an employee’s conduct or employer’s conduct or motive do not require a court to interpret any term of a CBA.
The issue to be decided was whether Pittard breached the training agreement and was liable for damages which could not be decided without first determining whether the agreement was valid under the CBA. The state law claim was not resolvable without interpreting the CBA and the state law claim should not have proceeded without a ruling from the arbitrator. The district court’s conclusion to the contrary was in error and its ruling on the state law claim was premature. As the case evolved, the Court concluded the error was harmless. Given the arbitrator’s ruling that the training agreement did not violate the CBA, no harm resulted from the district court prematurely ruling on the motion.
District Court’s authority to determine whether the agreement violated the CBA: Pittard’s appellate brief was filed prior to the arbitrator’s ruling. When issued, the arbitrator concluded the training agreement did not violate the CBA. Pursuant to the terms of the CBA, the arbitrator’s decision is final and binding. It was neither the district court’s nor the Wyoming Supreme Court’s function to review the merits of the arbitrator’s decision. The Court discussed United Paperworkers Int’l Union, AFL-CIO v. Misco, Inc. It was a direct appeal to federal court seeking review of an arbitrator’s decision. In the instant case, this was a separate proceeding filed in state court alleging a state cause of action for breach of an individual contract between employer and employee where neither party sought direct review of the arbitrator’s decision as was the case in Misco. The Court stated the principles espoused in Misco applied with equal force in the present case. The arbitrator ruled that the pilot training agreement did not violate the CBA and the Court stated they were not at liberty to reconsider the ruling.
Summary judgment on affirmative defenses and counterclaims: Pittard claimed the training agreement was unenforceable because Great Lakes’ nondisclosure of its terms was unconscionable and he signed it under duress. The Court stated they approach claims that a contract is unconscionable cautiously. The Court considers the claim from two perspectives: whether the contract provisions unreasonably favored one party over the other and whether the latter party lacked a meaningful choice in entering into the contract. Most courts require evidence of both and take a balancing approach in applying them. The evidence presented by Pittard tended to show several of the factors necessary for procedural unconscionability, however, no evidence was presented showing the training agreement itself was substantively unconscionable.
To prove a claim of economic duress, Pittard was required to show he involuntarily accepted the terms of the training agreement; circumstances permitted no other alternative; and such circumstances were the result of coercive acts by Great Lakes. The Court noted they applied the above principles in Blubaugh v. Turner and in Dobson v. Portrait Homes, Inc. The Court stated a party must present concrete evidence of the particular factors depriving him of his free will and giving him no reasonable alternative. The party must also present evidence showing that he was coerced by wrongful conduct. Pittard did not present evidence showing why he could not have refused to sign the agreement and if his refusal had caused Great Lakes not to hire him, looked for a job elsewhere. In fact, a little more than a month later, Pittard chose to terminate his employment with Great Lakes which suggested to the Court he was not so financially burdened that he was unable to leave Great Lakes and seek other employment.
There was no evidence that Great Lakes intentionally concealed the details of the training agreement in order to coerce him into quitting his job and relocating only to spring it on him and force him to sign it once in Cheyenne. As a mater of law, the Court stated, the evidence presented was not sufficient to sustain his affirmative defense of economic duress and the district court properly granted summary judgment for Great Lakes on its breach of contract claim.
The Court then considered the counterclaims for negligent misrepresentation/nondisclosure and breach of the implied covenant of good faith and fair dealing. Pittard did not present evidence indicating that Great Lakes presented false information about the requirement of re-paying the cost of training. The Court has stated that nondisclosure of information cannot support a claim for misrepresentation. In light of the arbitrator’s ruling that the pilot training agreement did not violate the CBA, the Court declined to address Pittard’s argument that the CBA created a special relationship of trust and reliance supporting his claim for breach of the implied covenant of good faith sand fair dealing. The Court declined to address Pittard’s claim that the RLA gave rise to a special relationship because he did not provide proper argument and citation of authority.

Holding: A decision on Great Lakes’ state law breach of faith contract claim required interpretation of the CBA entered into between Great Lakes and Local 747, a matter exclusively within the province of the arbitrator. The district court should have stayed or dismissed without prejudice the state action until the arbitrator issued a ruling on the Local 747 grievance. However, any error by the district court in proceeding with the state law claim was harmless given the arbitrator’s subsequent ruling that the training agreement did not violate the CBA. The arbitrator’s ruling is binding and not subject to re-consideration or review by the Court.
The Court held Pittard failed to present evidence showing the existence of a genuine issue of material fact and summary judgment was proper on the breach of contract claim. Pittard did not present sufficient evidence to support a negligent misrepresentation claim and failed to present cogent argument or legal authority supporting his claims of nondisclosure and breach of the implied covenant of good faith and fair dealing. Therefore the Court declined to address those issues.

Affirmed.

J. Kite delivered the decision.

Link: http://tinyurl.com/2hy8fy .